It’s a mixed and in some ways misleading report.
The economy added 163,000 jobs in the private sector, while a separate household survey shows the economy lost 195,000 in July. Hence, the unemployment rate rose one-tenth of a point to 8.3%.
That number represents Americans actively looking for work, but finding none -- and it doesn’t begin to tell the true tale of our nation’s sluggish economy.
The unemployment rate fails to gauge the number of Americans who are “under-employed.” Sure, they’re making a pay-check, are not consuming jobless benefits, but nevertheless are victims of the massive hangover from Wall Street’s excesses. They are still worse off than they were before the bottom dropped out in 2008.
So what’s the real rate of economic misery when you factor in those neighbors?
It is a little known number in the jobs report, something the Labor Department calls the U-6 rate. This number includes people who want full-time work, but must be content with part-time employment. In some cases those people are counted as employed, even though they are working only one hour a week. The U-6 also includes “discouraged workers” -- those folks who want a job, but after weeks of failure, have quit looking.
I did some number-crunching with today’s report to get the U-6 figure.
Today’s actual unemployment/underemployment rate skyrockets to 15.2% for July ... a difference of nearly 7 percentage points … or 83% higher than the traditional unemployment rate.
Even as the unemployment rate improves, you aren’t getting a complete picture of economic well-being unless the number of people suffering underemployment and discouragement also shrink.
The Wall St. Journal focused on states seeing the biggest gap between the jobless rate and the true rate of economic misery. California leads the pack. There’s a 9 percentage point difference between the jobless rate (11.2%) and the broader underemployment rate (20%).
Michigan’s gap is fifth-largest in the nation.
In June, our unemployment rate stood at 9.4%. But our true rate of economic trouble was 17.4%--nearly double the jobless number.
It shows that while we’ve had tremendous improvement in the manufacturing sector, and are seeing steady progress every month, many are still hurting badly.
And this economy’s record of job growth is both tenuous and the least robust of any recovery in decades.